Third Eye OSINT publishes enlightened commentary on geopolitics. The articles will always reflect a pro-American personal viewpoint, because the author is a loyal citizen of the United States of America. This blog is a wholly-owned project of Alfidi Capital.

Tuesday, March 11, 2014

Africa Brightens Its Day

Africa still wrestles with its colonial legacies. Pierre Englebert's State Legitimacy and Development in Africa discusses illegitimate states whose modern functions are not contiguous with their pre-colonial functions, partly due to artificially drawn borders. Their seemingly interminable corruption and inefficiency stem from the difficulty of managing these borders. These states expend enormous resources supporting themselves instead of funding vital public goods. State corruption precludes African entrepreneurs from counting on a fair shake from their own leaders. This provides a window into what is going right in Africa.

Africa has room to grow. The World Bank's data for Sub-Saharan Africa shows that it lags behind the MENA region in GNI per capita and life expectancy. MENA's oil-producing countries have their own problems with artificial borders and corruption yet they outperform their southern neighbors. The oil wealth of the MENA region is not the only explanation for its advantage over the rest of Africa. A large number of the World Bank's heavily indebted poor countries (HIPC) are in Sub-Saharan Africa. None of the developing MENA countries appear in the HIPC group. The explanation for the development differential between MENA and Sub-Saharan Africa isn't as simplistic as the presence of oil in the north and the burden of debt in the south. Knowing that this disparity exists provides a context for national developmental goals; resource-rich African countries can export their way to success rather easily, while debt-burdened countries cannot. This developmental gap needs further analysis.

Africa has the multilateral institutions it needs. The African Union and African Development Bank speak for the continent. Whether they speak for corrupt autocrats or ordinary Africans is up for debate. State illegitimacy casts doubt on the ability of officials to push true development agendas without lining their own pockets. Bottom-up agendas can build credibility in areas that top-down agendas can't reach. Bankers Without Borders' Sub-Saharan program has completed multiple microeconomic assessments that allow investors to bypass dysfunctional state programs. This philosophy supports the Center for Financial Inclusion's FI2020 goal of maximizing the participation of developing country citizens in the world's financial markets. Even the UN Research Institute for Social Development recognizes the importance of non-state mechanisms for socioeconomic development.

Africa has the culture and infrastructure for innovation. Nigeria's "Nollywood" produces more movies than the US. The New Partnership for Africa's Development (NEPAD) is like a hybrid of the US's own intergovernmental bodies devoted to innovation. The Africa Finance Corporation channels investors into infrastructure projects, although its initial capital and membership are limited. A Google search of that organization with the word "corruption" reveals some troubling early stories of mismanagement.

The World Bank's data on value-added manufacturing reveals that Africa's efforts at developing a hi-tech economy have not yet borne fruit. The Excel data download comes in handy for regional comparisons. Both the MENA and Sub-Saharan regions trail the US and world averages for the portion of the economy devoted to value-added manufacturing. Interestingly, both regions do track fairly closely to the numbers for the HIPC group. If manufacturing doesn't differentiate MENA from Sub-Saharan Africa, then resource extraction is probably the key difference between those regions.

Development usually follows a clear pattern in the life of most nations, and it is hard to skip from agriculture and extractive sectors directly to high-tech innovation. The US and Germany were large agricultural producers whose exports produced excess capital available for investment in manufacturing. Many African nations have abundant natural resources. They need leaders with the foresight to convert resource exports into capital surpluses for their domestic tech sectors. The UN's Global Pulse reports on Big Data in development can show African leaders how to leverage their countries' unique gifts.

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Third Eye OSINT is written and maintained exclusively by Anthony J. Alfidi. The opinions expressed here are solely those of the author and do not represent the official or unofficial position of any government entity. The information presented here is drawn solely from unclassified, open sources available to the general public. In other words, I wrote this stuff.